The Central Bank of Nigeria on Wednesday ordered the Deposit Money Banks and other financial institutions in the country not to transact in virtual currencies popularly called crypto or digital currencies.

The CBN listed some of the digital currencies as bitcoin, ripples, monero, litecoin, dogecion and onecoin.

In a circular dated January 12, 2017, the apex bank told the DMBs and other financial institutions that the digital currencies were not legal tenders in Nigeria.

Consequently, it warned that any institution or individual dealing in such currencies was doing so at their own risk.

Titled: ‘Circular to banks and other financial institutions on virtual currency operations in Nigeria’, the document was signed by the Director, Financial Policy and Regulation, CBN, Mr. Kevin Amugo.

It read in part, “The attention of the banks and other financial institutions is hereby drawn to the above risks and you are required to take the following actions pending substantive regulation or decision by the CBN: Ensure that you do not use, hold, trade and/transact in any way in virtual currencies; and ensure that existing customers that are virtual currency exchangers have effective AML/CFT controls that enable them to comply with customer identification, verification and transaction monitoring requirements.

“Where banks or other financial institutions are not satisfied with controls put in place by the virtual currency exchangers/customers, the relationship should be discontinued immediately; and any suspicious transactions by these customers should immediately be reported to the Nigerian Financial Intelligence Unit.

“The CBN reiterates that the VCs such as bitcoin, ripples, monero, litecoin, dogecion, onecoin, etc and similar products are not legal tenders in Nigeria, thus any bank or institution that transacts in such businesses does so as its own risk.”

About the Author

Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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